by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)
These are not alternate lyrics to the the classic Village People song, YMCA, but they could be if the song were written by the Appellate Division panel that recently decided Lequerica v. Metropolitan YMCA of the Oranges.
In Lequerica, plaintiff was injured during a group strength and conditioning class at the YMCA. At one point, the instructor had the the class run toward a wall, touch it, and then return to the wall where they started. According to the Appellate Division:
On her return, plaintiff realized she was going too fast, and when she tried to stop she fell forward and hit her head "extremely hard" on the concrete wall in front of her. While running toward the wall, plaintiff was competing with a friend to see who could reach it first. Before she fell, plaintiff put her arm out in front of her friend in an effort to beat her to the wall. Plaintiff testified she was running so fast she felt she would not be able to stop at the wall, that she "tried to stop herself," and that ultimately, she "tripped."
Plaintiff suffered "a concussion, a large scalp laceration, and a left wrist fracture." She sued the YMCA and the instructor.
Defendants moved for summary judgment, arguing that (1) they were immune from liability under the Charitable Immunity Act, and (2) plaintiff could not establish a prima facie case of negligence. Plaintiff opposed the motion, arguing that the YMCA was not covered by the Charitable Immunity Act and that summary judgment was premature because discovery was not yet complete.
The trial court held that the YMCA was not entitled to immunity under the Charitable Immunity Act. The Act protects entities that operate "exclusively" for religious, charitable, or educational purposes. (This does not mean that the entity must operate "exclusively" for religious purposes or for charitable purposes or for educational purposes. It means that it must operate "exclusively" for one of those purposes rather than some other purpose.) According to the trial court, the YMCA does not qualify under this standard because it operates with a "hybrid purpose," offering services for religious, charitable, or educational purposes but also offering services for profit. According to the trial court, "[b]ecause the YMCA operates dually for profit," it "does not clearly operate exclusively for religious, charitable, or educational purposes" (emphasis in original), and therefore was not entitled to charitable immunity.
But, the trial court granted defendants' motion and dismissed the complaint because it found that plaintiff had assumed the risk of injury by participating in the group fitness class. It held that plaintiff, who was no stranger to the YMCA or group fitness classes in general, understood the risk when she ran "competitively toward the wall." Because, according to the trial court, there was no indication in the record that the wall was dangerous or defective, and no evidence that the instructor or the YMCA knew of any dangerous condition and failed to remedy it, plaintiff could not prove her negligence claim.
After the summary judgment motion was argued, but before it was decided, plaintiff submitted an expert report that concluded that the instructor created a dangerous condition by having the class run all the way to the wall instead of stopping at least ten feet before the wall, and that the wall itself was dangerous because it did not have padding all the way down to four inches above the floor. After receiving the court's decision on defendants' summary judgment motion and in reliance on the expert report, plaintiff moved for reconsideration, but her motion was denied. Plaintiff appealed.
The Appellate Division reversed the trial court, holding that both aspects of its decision were premature.
First, the Appellate Division held that plaintiff's expert report, which was timely served, "directly [spoke] to defendants' alleged negligence." Accordingly, it created fact issues that precluded summary judgment on plaintiff's negligence claim.
Second, the Appellate Division held that additional discovery was needed on the YMCA's charitable immunity affirmative defense. In doing so, it provided a helpful framework for any entity like the YMCA — which combines charitable efforts with for-profit efforts — that might seek immunity under the Charitable Immunity Act.
The provisions of the Charitable Immunity Act are remedial, and therefore must, as set forth in the statute itself, "be liberally construed so as to afford immunity to the [ ] corporations, societies and associations from liability . . . in furtherance of the public policy for the protection of nonprofit corporations, societies and associations organized for religious, charitable, educational or hospital purposes." As the Appellate Division observed, this type of remedial legislation is unusual because it protects the entity against whom a claim would be brought rather than the allegedly wronged claimant: "Most often, remedial legislation is interpreted so that it is applied liberally for the benefit of claimants. The Charitable Immunity Act, however, specifies that it is to be 'liberally construed' in favor of the protected entities, that is, the charitable institutions that the Legislature has chosen to shield, and against the interests of those who would make claims against them."
Immunity under the Charitable Immunity Act is not "automatic because an organization declares its purpose as charitable." "Whether a nonprofit entity, whose certificate of incorporation and by-laws provide that it is organized exclusively for charitable, religious, educational, or hospital purposes, actually conducts its affairs consistent with its stated purpose often requires a fact-sensitive inquiry." In other words, to be entitled to charitable immunity, an entity must do more than simply declare that it is organized exclusively for religious, charitable, or educational purposes. Rather "[w]hat is required is an examination of the entity seeking to clothe itself in the veil of charitable immunity to discover its aims, its origins, and its method of operation in order to determine whether its dominant motive is charity or some other form of enterprise."
When determining an entity's "dominant motive," the phrase "organized exclusively for religious, charitable or educational purposes" is interpreted broadly." And, "[a]lthough the overarching character of all three [of these] categories is eleemosynary, they are distinct and warrant slightly different analyses." (Although, of course, I knew what "eleemosynary" meant, I looked it up in case you didn't know. It means "of, relating to, or supported by charity.") In Lequerica, the Appellate Division analyzed all three of these purposes.
Under the Charitable Immunity Act, "[r]eligious purposes are not narrowly limited to parochial activities by churches." Rather, they include any services that provide for "the advancement of the spiritual, moral, ethical and cultural life of the community in general." In Lequerica, the Appellate Division noted that the YMCA was formed to "develop Christian Character and to aid in building a Christian Society," but that the current entity "appears more secular and the record blurs the relationship between the advancement of Christian values and the YMCA's current instructional programs and offered facilities." Therefore, the Appellate Division was "unable to conclude on [the] record that the YMCA's activities exclusively pursue a religious purpose."
The YMCA also argued that it was organized exclusively for educational purposes. "The term 'education' as used in the [Charitable Immunity Act] broadly defines instructional pursuits, which is not constrained to mean a scholastic institution." To that end, offering "other activities or services will not necessarily 'eviscerate' charitable status as long as the services or activities further the charitable objectives the entity was organized to advance." If the "other activities or services" have supplanted the educational objectives of the entity, then it will not be entitled to immunity. But, if those activities and services further the entity's educational objectives, then it will. In Lequerica, the Appellate Division held that it was too early in the case to make this determination:
On the present record, we are not in a position to compare the extent of the educational programs against the whole of the YMCA's activities to discern if education is the dominant purpose of its organization, or to examine the relationship of the gym facility and the fitness classes to the organization's asserted educational purposes. We conclude the parties should be allowed to complete discovery in order to further develop their positions with respect to whether the YMCA's activities qualify as exclusively educational as that term is construed under the [Charitable Immunity Act].
Finally, the Appellate Division held that it was too early to tell whether the YMCA was organized exclusively for charitable purposes. When an entity claims to be organized for charitable purposes, a court must conduct a "source of funds assessment" to determine the "dominant motive of the entity's operations." The court explained this process as follows:
An organization's efforts, either by the dedication of donations or other programs of charitable solicitation, must be shown to further a charitable purpose that lessens a government burden. Courts must examine the entity's "aims, its origins, and its method of operation in order to determine whether its dominant motive is charity or some other form of enterprise." To accomplish this, the court scrutinizes the organization's charter, daily operations, relationship to other entities, the extent to which an organization lessens a burden on the government, and its operational funding.
Doing so requires a court to review the entity's receipts. "If significant charitable donations are designated for the organization's charitable purposes, immunity will attach even if receipts are also raised from non-charitable activity." Without the benefit of discovery about the YMCA's receipts, the Appellate Division held that it was impossible to perform this "source of funds assessment." Accordingly, the Appellate Division could not determine if the YMCA was organized exclusively for charitable purposes.
The Appellate Division decision does not mean that the YMCA is not entitled to charitable immunity. It just means that it was premature for the trial court to grant the YMCA summary judgment on that issue. The Appellate Division noted, however, that YMCA was free to move for summary judgment on this issue after discovery was completed.